There are indications of a possible fuel shortage in Nigeria as the 650,000 barrels per day Dangote Refinery and Petrochemicals, which is responsible for over 60 per cent of domestic supply, is now getting only about 40 per cent of local feedstock.
According to the chief executive of Dangote Refinery and Petrochemicals, Mr David Bird, the refinery currently gets only about five cargoes of crude monthly, against an expected 13 to 15 cargoes.
He explained that this was below its agreed crude oil supply under the Federal Government’s crude-for-Naira arrangement.
According to him, the shortfall has affected the refinery’s ability to optimise local crude supply despite existing agreements being fully met.
“What we see under that agreement, we should be getting about 13 to 15 cargoes a month. And that’s what we could process to meet the domestic fuel requirements of Nigeria.
“Currently, we’re only getting five. So, that’s an underperformance against that pre-agreed volume contract.”
Mr Bird stated that the crude-for-Naira policy was designed to stabilise Nigeria’s foreign exchange market rather than provide financial advantages to the refinery, adding that the company still purchases crude at international benchmark prices.
He explained that the shortfall had caused the refinery to source preferred Nigerian crude grades from the international market at higher costs.
“And that value between the purchase price and the premium that we’re now seeing is money that Nigeria is leaking to the international trading community,” he said.
Last year alone, Dangote Petroleum Refinery imported a total of $3.74 billion worth of crude oil to make up for shortfalls
The Nigerian National Petroleum Company (NNPC), which is the refinery’s main trade partner and minority stakeholder, has been plagued by challenges that restrict optimal crude supply, so the Lagos-based company has to get feedstock from alternative supply links. This led to the importation of crude from Brazil, Equatorial Guinea, Angola, Algeria, and the US, among others.
For instance, in March 2025, the company said it now counts Brazil and Equatorial Guinea among its global oil suppliers, receiving up to 1 million barrels of the medium-sweet grade Tupi crude at the refinery on March 26 from Brazil’s Petrobras.
While Nigeria has so far been insulated from shortages that have plagued countries in South Asia and some parts of Europe, disruptions to trade triggered by the Middle East war may constrain flows, leading to higher prices, even for countries not directly affected.